Tech Talk for Friday December 7th 2018

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Pre-opening Comments for Friday December 7th

U.S. equity index futures were higher this morning. S&P 500 futures were up 6 points in pre-opening trade.

Index futures moved higher following release of the U.S. November Employment Report at 8:30 AM EST. Consensus for November Non-farm Payrolls was 209,000 versus 250,000 in October. Actual was 155,000. Consensus for November Unemployment Rate was an increase to 3.8% from 3.7% in October. Actual was 3.7%. Consensus for November Hourly Earnings was an increase of 0.3% versus a gain of 0.2% in October. Actual was an increase of 0.2%.

The Canadian Dollar advanced 0.42 to U.S.75.14 cents following release of the November Employment Report at 8:30 AM EST. Consensus was an increase of 10,000 versus a gain of 11,200 in October. Actual was an increase of 94,100. Consensus was a drop in the Unemployment Rate to 5.7% from 5.8% in October. Actual was 5.7%.

Crude oil gained 4% after OPEC announced an agreement to reduce their production by 1.2 million barrels per day. Consensus was a reduction of 1.0 million barrels per day.

Cronos Group gained $3.47 to $13.95 and Altria added $0.70 to $55.10 after Altria announced purchase of a 45% interest in Cronos at $16.25 Cdn. per share. Value of the purchase is estimated at U.S. $1.8 billion ($2.2 billion Cdn.).

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Big Lots dropped $7.22 to $33.08 after reporting less than consensus third quarter results. The company also lowered guidance.

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Lululemon added $1.66 to 133.10 after reporting higher than consensus third quarter earnings.

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EquityClock’s Daily Market Comment

Following is a link:

http://www.equityclock.com/2018/12/06/stock-market-outlook-for-december-7-2018/

Note seasonality charts on Non-farm Payrolls, Manufacturer New Orders, Canadian Exports and Canadian Imports.

 

Observations

Brutal day for North American equity markets yesterday! Two exceptions: Canadian gold stocks and interest sensitive U.S. equities, notably REITs. IYR reached an all-time high.

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Russell 2000 was the first broadly based index to break below lows set in late October.

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StockTwits Released Yesterday @EquityClock

Technical action by S&P 500 stocks to 10:15: Bearish. 36 stocks broke intermediate support. None broke resistance. $STT

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Editor’s Note: After 10:15 AM EST, another 25 S&P 500 stocks moved below intermediate support.

Eurozone ETF $EZU as well as iShares Europe $IEV moved below support extending an intermediate downtrend

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United Kingdom iShares $EWU moved below $30.77 extending an intermediate downtrend.

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BMO Equal Weight Bank ETF $ZEB.CA moved below $27.41 extending an intermediate downtrend

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National Bank $NA.CA, a TSX 60 stock moved below $58.73 extending an intermediate downtrend

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Toromont Industries $TIH.CA moved below $56.01 extending an intermediate downtrend

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Agnico-Eagle $AEM $AEM.CA, a TSX 60 stock moved above $50.84 Cdn. extending an intermediate uptrend

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EAFE iShares $EFA moved below $60.58 extending an intermediate downtrend

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Toronto Dominion Bank $TD.CA, a TSX 60 stock moved below $70.32 extending an intermediate downtrend

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Sun Life Financial $SLF.CA, a TSX 60 stock moved below $46.48 extending an intermediate downtrend

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US Factory Orders down 0.7% (NSA) in October, better than the 1.6% decline that is average for the month. $MACRO #Economy #Manufacturing

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Financial SPDRs $XLF moved below $25.02 extending an intermediate downtrend.

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Kirkland Lake $KL.CA moved above $30.90 to an all-time high extending an intermediate uptrend

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Trader’s Corner

Equity Indices and related ETFs

Daily Seasonal/Technical Equity Trends for December 6th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

Commodities

Daily Seasonal/Technical Commodities Trends for December 6th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

Sectors

Daily Seasonal/Technical Sector Trends for December 6th 2018

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Green: Increase from previous day

Red: Decrease from previous day

 

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http://www.equityclock.com/about/seasonal-advantage-portfolio/

 

S&P 500 Momentum Barometer

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The Barometer added 0.40 to 41.60 yesterday. It remains Intermediate Neutral.

 

TSX Momentum Barometer

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The Barometer dropped 5.37 to 34.30 yesterday. It remains Intermediate Oversold.

 

Disclaimer: Seasonality and technical ratings offered in this report and at

www.equityclock.com are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed

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17 Responses to “Tech Talk for Friday December 7th 2018”

  1. Ron/BC Says:

    Here is the best looking $GOLD trade I can find. This is a GOLD ETF:IAU which I’ve overlaid the $GOLD ETF:GLD that tracks IAU almost perfectly. Nice chart showing resistance clearly at $11.90 which was the Dec/2017 low and was tested as resistance last October. Price is presently testing this resistance again and poking its nose above a little. IAU tracks $GOLD closely and the metal has been outperforming the precious metal stocks for a long time now other than the last 3 months which is also a positive sign for most precious metal trades ahead. The Gold stocks could continue to see tax loss selling in December while the metal itself is not subject to the same selling. And IAU is dirt cheap with tons of volume. So far this morning there has been over 6 million shares traded. The RSI 8 is overbought but not a concern with a looming breakout. The RSI 8 is very good for catching selloff lows as the vertical dotted lines show. It is not a good indicator in steady selloffs,also as shown, unless day trading the brief bounces. Longer term Modified MACD trends are positive and rising as well. Bottom line: IAU price must clear and hold above $11.90 to suggest a price reversal back up again. The evidence of this occurring is improving. Only negative is it would take a big price move up to make a lot of money unless one owned a lot shares. While percentage moves sound good you don’t spend percentages you spend dollars. Not a lot of dollar moves up on this one unfortunately. But owning some would be a ‘feel good’ trade with little downside ‘dollar’ risk if you just want to ‘be onboard’.

    https://stockcharts.com/h-sc/ui?s=IAU&p=D&yr=2&mn=0&dy=0&id=p7615190496c&a=579408627

  2. Wayne Smith Says:

    Ron/BC,
    It’s been quite a while since I played this puppy. Good looking chart. I’ll probably wait for a breach of the 200 before committing any $$$$’s for a quick trade.

    Great analysis – as always.
    Thanx!

  3. DougP Says:

    RE.1 and 2: Do either of you have views on ABX? I have had a small holding for some time now. I am always bothered by the volatility this huge stock has, which one can only attribute to poor management. Yet looking over 1 year and 3 years, and especially in recent weeks, it has kept pace with IAU and GLD. Is it worth the swap?

  4. Rol Lew Says:

    http://www.321gold.com/editorials/chan/chan120318.html

    All 5 were on on sell a few weeks ago

  5. Ron/BC Says:

    Here again is a MONTHLY multi decade long chart of the $TNX which is the U.S.10 Year Yield chart. Using the RSI 8 above, note each of the 6 times within a 31 year time frame the RSI 8 has crossed above the 70 line and then crossed down below this line the yield on the 10 year rate has fallen for a year or two. So far it is still on track to repeat despite the ‘short term’ rate hikes. Perhaps it’s time for 10 year rates to also go over the waterfall along with the economy as before.

    https://stockcharts.com/h-sc/ui?s=%24TNX&p=M&st=1986-10-01&id=p3584592639c&a=579408636

  6. Ron/BC Says:

    DougP
    Here is a chart of ABX on the NYSE. You can see price like many Gold stocks along with Gold ETFs is bumping up against resistance. ABX needs to clear “and hold” above this downtrendline and price resistance at $13.70 to suggest a change in trend back to up. Even the outperformer KL is at price resistance. I’ve drawn in ratio charts above the ABX chart to show how it is performing against IAU and GLD and GDX. I posted other charts and comments on this site yesterday as well. The acid test is to see what the Gold stocks and Gold will do when the broad stock market bounces back. This will tell us if the bounce in Gold trades is valid or just a reaction to the broad market selloff. And tax loss selling into Dec 27th could keep Gold stocks weak as well. But as always,draw your own conclusions when viewing charts and comments.

    https://stockcharts.com/h-sc/ui?s=ABX&p=D&yr=4&mn=0&dy=0&id=p9566992054c&a=610725533

    https://stockcharts.com/h-sc/ui?s=KL&p=D&yr=2&mn=0&dy=0&id=p0683479209c&a=579408498

  7. Wayne Smith Says:

    Ron/BC,
    Hey Ron – were you ever caught in a “limit down” move back in the 80’s? I just got an e from a trading bud who has only been trading for 5 years lamenting the 500 pt drop in the Dow today. I remember taking a big hit in the USD after the Plaza Agreement in 1985. The USD went into free fall on Sunday night in Asia and the pit went wild on the Monday open – our group got out with a 5 figure loss.

  8. Ron/BC Says:

    Wayne
    No I never got caught in a limit down move on commodities or stocks. I did trade all my RRSP money from CD$ to U.S.$ in mid 2008 at par and made a bundle on the CD$ plunge into late 2008 and then switched back to CD$ and saw it rally straight up again and then another big move right after. While I looked like a genius catching it 3 times in a row for big moves it was more luck than skill I think,lol. So 2008 into 2009 was one of the best years I’ve ever had in the markets. I guess that’s why I like to stay in U.S.$ as it does have the edge over other currencies. But I did get hammered badly on Options back in the late 80’s. I had a commodity broker that used a sure fire strategy that blew up. Never traded them again. Just too many ways to lose………..

  9. kam Says:

    Ron/BC,

    Thanks for IAU & 10yr yield chart.
    I think IAU is clone of GLD, just run by Ishares. Gold looks like it have that look but we have seen that movie before so who knows,lol. But gold strength is not deniable with USD high too. It might be money moving to safe asset from stocks and maybe Bitcoin Hodlers are throwing towels too and coming to mainstream assets for now IF they have any $$ left.

    DougP,

    Abx is the best miner in Majors at the moment so if you think market will go up then I won’t sell it.

    SPX,

    What a whipsaw at the moment. yesterday I lost $$ trying to buy bottoms but when bottom came I didn’t buy it. Today I try again couple of time and bottom nvr came,lol. I am pretty much sitting in cash now, too hard to trade with work, almost a lose lose situation unless one is lucky. Cash is king.
    One thing I want to post is that one of the analyst at EW thinks that with the close today the market is setup for a bloody Monday event when it can gap down hard and don’t recover by Monday open.One thing look like for sure that if we fall below 2600, we are going sub 2500.Now that I bought ES puts at close, it most likely won’t fall and I will lose again.:)

  10. dutchcanuck Says:

    #1 Ron, thanks for the chart.
    Click on the seasonality at the bottom of the chart to find the Jan/Feb favourability.

  11. dutchcanuck Says:

    Perhaps gold is telling us that the US$ has topped. If the US Fed backs off on rate increases the yankee buck will drop.

  12. Polish1 Says:

    Bitcoin monitoring
    the daily ETF, could be setting up into a tight little wedge
    https://stockcharts.com/h-sc/ui?s=GBTC&p=D&yr=0&mn=7&dy=0&id=p8683599151c&a=634859828&listNum=59

  13. Polish1 Says:

    Santa Claus at the Exchange
    https://bpt-news-images.s3.amazonaws.com/0190953001544214154

  14. Polish1 Says:

    umbrella top in the DAX sure has played out
    https://bpt-news-images.s3.amazonaws.com/0236597001544239800

  15. Polish1 Says:

    Ugly Week for Stocks
    The FANGMAN stocks are now in a peculiar position. Their combined market cap had once upon a time – namely August 31 – been $4.63 trillion. It has since plunged by 22.4%, or by $1.037 trillion, an astounding loss for just seven stocks. Friday was outright bloody for Apple, Nvidia, and Netflix:

    Facebook [FB]: $137.42 (-1.6%)
    Google [GOOG]: $1,036.58 (-3.0%)
    Amazon [AMZN]: $1,629.13 (-4.1%)
    Apple [AAPL]: $168.49 (-6.3%)
    Microsoft [MSFT]: $104.82 (-4.0%)
    Nvidia [NVDA]: $147.61 (-6.7%)
    Netflix [NFLX]: $265.14 (-6.27%)
    Their combined market cap dropped 3.7% today, giving up $137 billion. For the week, they plunged $419 billion, or 10.4%. And they’re down 22.4%, or a feather-ruffling $1.04 trillion, from their combined market cap peak on August 31:

  16. Ron/BC Says:

    Dutchcanuck
    Re:#11

    Well Mario Draghi of the ECB is speaking Thursday which will affect the Euro and the U.S.$. (and ultimately Gold as well I would guess). I can’t see anything he’d say that would be positive but hey, you never know what he’ll say to affect the currencies. I wish I knew the guy. So far the U.S.$ chart still looks good to me……..But all I can do to protect my value in U.S.$ is to hopefully see the stock market bounce back and watch what Gold does. I just might trade in my U.S.$ for a Gold trade “IF” the Gold group holds onto their recent breakouts. Definitely don’t want CD$ or Euros. Just trying to decide which Gold trade to make. IAU is theoretically excellent but I can’t see a lot of dollar upside in it unless I really load the boat. And I’m very nervous about AEM which is a excellent Gold stock but pricey and can move big up “and down”.

    https://stockcharts.com/h-sc/ui?s=%24GOLD%3A%24USD&p=D&st=1975-09-03&en=today&id=p45566363133&a=579408277

    https://stockcharts.com/h-sc/ui?s=AEM&p=D&yr=4&mn=0&dy=0&id=p0034294754c&a=579408268

  17. Polish1 Says:

    Here’s a handful of yearly charts to show the % G/L of various sectors

    $BKX – Chart Link – Banks down -12.6%

    XLF – Chart Link – Financials down -8.9%

    OIH – Chart Link – Oil Service Stocks – down an incredible -35.2%

    $TRAN – Chart Link – Transports down -6.25%

    XLE – Chart Link – Energy down -9.5%

    XLI – Chart Link – Industrials down -8.9%

    XLK – Chart Link – Technology up 2%

    XLU – Chart Link – Utilities up nearly 10% for the year

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